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Winds of Change at the DOJ for Corporate Prosecutions?

Why it matters: On Sept. 14, 2017, Deputy Attorney General Rod Rosenstein indicated during a Q&A session that “there may be some change to the policy on corporate prosecutions” in the works at the DOJ. While Rosenstein did not indicate which parts of the DOJ’s current policy were under review, the DOJ’s last big pronouncement relating to corporate prosecutions was made in September 2015 by his predecessor, Sally Yates, in a memo known as the “Yates Memo,” that officially reconfirmed the long-stated DOJ policy that individual corporate wrongdoers should be held accountable.

Detailed discussion: As reported by Politico, in a Q&A session following a speech at the Heritage Foundation in Washington, D.C., on Sept. 14, 2017, Deputy Attorney General Rod Rosenstein indicated that change was coming to the DOJ’s current policy on corporate prosecutions: “It’s under review and I anticipate that there may be some change to the policy on corporate prosecutions. I don’t have any announcement about that today, but I do anticipate that we may in the near future make an announcement about what changes we’re going to make to corporate fraud principles.”

While Rosenstein did not indicate which parts of the DOJ’s current policy were under review, the DOJ’s last big pronouncement relating to corporate prosecutions was made a little over two years to the day earlier, on Sept. 9, 2015, by his predecessor, Sally Yates, in a memo titled “Individual Accountability for Corporate Wrongdoing” (aka the “Yates Memo”). The Yates Memo detailed “six key steps”—described as a combination of new measures reflecting “policy shifts” as well as those that “reflect best practices that are already employed by many federal prosecutors”—that the DOJ would be taking to ensure that, in both criminal and civil corporate investigations going forward, individuals accused of corporate misconduct would also be held accountable. See our Sept. 21, 2015, Newsletter under “Here’s Looking at You, Kid—DOJ Announces Six Specific Steps to Hold Individual ‘Corporate Wrongdoers’ Accountable” for a summary of the Yates Memo.

According to Politico, in response to questioning Rosenstein said that he was in favor of prosecuting corporate wrongdoers in appropriate situations: “Corporations, of course, don’t go to prison. They do pay a fine. The issue is can you effectively deter corporate crime by prosecuting corporations or do you in some circumstances need to prosecute individuals. I think you do.”

Rosenstein described reviews such as the one he was hinting at as “pretty routine” and mostly a consequence of the new administration reviewing the policies and guidelines of the previous administration to see if they are “effectively addressing what we think is the crime problem of the present.”